For running games from HD, you'll be wanting WHDLoad
. This baby lets you install loads and loads of games to hard drive and is a must.
You can download pre-installed games from somewhere like WHDownload
, or you could download KillerGorilla's packs though I'm ashamed to admit I've forgotten the URL.
As for hard drives.... Ebay is worth checking obviously, but it's probably easier to get hold of a internal 2.5" IDE drive (you can use 3.5" drives but they can be a tight fit apparently). You can't reliably use a drive bigger than 4Gb though so you'll have to buy one smaller than that.
Not sure where you'd get external drives from I must admit.